How To Start Building Your Emergency Fund
But when it comes to saving for an emergency fund, things might be difficult. Some of us aren’t earning a lot, so building our emergency fund little by little is the only way and I hope the ways that I will tell you below can help you out.
7 Simple Ways To Save For An Emergency Fund
Decide how much you need
As said on my previous post about emergency funds, you should have at least 3 months of your monthly expenses saved. Base how much you need on your past three months of expenses, your utility bills, and other expenses in your family, then multiply it to how many months you want your emergency fund to sustain. If you think you’re going to need to have more than 3 months, then it’s your call. There’s nothing wrong on being prepared for the worse.
Make a monthly budget
Now that you have to save for an emergency fund of your own, it’s the best time to have your own budget plan. If you already have one, then you’re gonna have to make little changes with it. If you’re already saving at least 10% of your monthly income, then adding 5% or 10% more wouldn’t be that hard for you. This is a great way to save for an emergency fund faster.
Cut down on your expenses
I know that some of you can’t just deduct that much money on your monthly income easily, so it’s time to learn how to cut down on your expenses and put some of those on your emergency fund.
If you think you’re going out or dining out too much, cut it down. If you can live without cable on your television, then that’s great, cut it down. If you’re family is wasting too much food, then maybe it’s time to plan your meals out properly to cut down on your food expenses. If you’re a jerk when it comes to impulse buying, then you need to learn how you can stop buying on impulse.
Sell things you don’t need
Another way to help you build your emergency fund is by cleaning your whole home and identifying the things that you don’t need and those that still have use for other people. If you can find at least 5 things and they still have some value left in them, then selling it is the right thing to do. This can aid you when it comes to saving for your emergency fund and get rid of the things you don’t need in your home and save you some space.
Open a high-yield savings account
Opening your own high-yield savings account for your emergency fund can be great because you’ll know that your money is secured and it can still earn some interest that can help it grow. Make sure that you get a savings account that you can access easily, so that when an emergency occurs, you can get it easily.
Increase your sources of income
Having other sources of income besides your job is not only great when it comes to building your emergency fund, it can also be a great boost to your financial life as well. Starting your own business can be great source of income for you and your family if done the right way. You can even earn money through the use of your laptop or computer, many already have done it and are still earning money online.
Investing is another way you can do to save for an emergency fund of yours and to improve your financial life too. Many successful and wealthy people today have multiple sources of income and are investing at the same time, so why can’t you, right?
You can even invest some of your saved emergency fund on some “safe” investments, this way you can grow your emergency fund better than when you just put it on the bank, and you can still get it whenever you need it.
Have you done some of those things before? Did it help you in building your emergency fund? Share your thoughts and suggestions, I will really appreciate it, your answers can even provide help for your fellow readers as well.
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